┌─────────────────────────────────────────────────────────────────────────────┐
│                    DEFI 1.0 LIMITATIONS                                     │
├─────────────────────────────────────────────────────────────────────────────┤
│                                                                             │
│  ┌──────────────────────────────────────────────────────────────────────┐   │
│  │                    LIQUIDITY FRAGMENTATION                          │   │
│  │  Liquidity is spread across many protocols and chains.              │   │
│  │  Inefficient capital allocation.                                    │   │
│  └──────────────────────────────────────────────────────────────────────┘   │
│                                                                             │
│  ┌──────────────────────────────────────────────────────────────────────┐   │
│  │                    CAPITAL INEFFICIENCY                             │   │
│  │  Over-collateralisation (150%+) ties up capital.                    │   │
│  │  Limited leverage options.                                          │   │
│  └──────────────────────────────────────────────────────────────────────┘   │
│                                                                             │
│  ┌──────────────────────────────────────────────────────────────────────┐   │
│  │                    SUSTAINABILITY ISSUES                            │   │
│  │  Liquidity mining creates short-term incentives.                    │   │
│  │  "Rug pulls" and unsustainable yields.                             │   │
│  └──────────────────────────────────────────────────────────────────────┘   │
│                                                                             │
│  ┌──────────────────────────────────────────────────────────────────────┐   │
│  │                    INTEROPERABILITY GAP                             │   │
│  │  Limited cross-chain communication.                                 │   │
│  │  Bridging risks and complexities.                                   │   │
│  └──────────────────────────────────────────────────────────────────────┘   │
│                                                                             │
│  ┌──────────────────────────────────────────────────────────────────────┐   │
│  │                    REGULATORY UNCERTAINTY                           │   │
│  │  Unclear legal status.                                              │   │
│  │  Compliance challenges.                                             │   │
│  └──────────────────────────────────────────────────────────────────────┘   │
│                                                                             │
└─────────────────────────────────────────────────────────────────────────────┘

# ===================================================================
# MODULE 8, LESSON 3: DECENTRALISED FINANCE (DEFI) 2.0
# ===================================================================

import pandas as pd
import matplotlib.pyplot as plt
import numpy as np
from typing import Dict, List
import warnings
warnings.filterwarnings('ignore')

print("="*70)
print("DECENTRALISED FINANCE (DEFI) 2.0")
print("="*70)

# ----------------------------------------------------------------
# PART A: PROTOCOL-OWNED LIQUIDITY SIMULATION
# ----------------------------------------------------------------

print("\n" + "-"*60)
print("PART A: Protocol-Owned Liquidity Simulation")
print("-"*60)

class ProtocolOwnedLiquidity:
    """
    Simulated protocol-owned liquidity management.
    """
    def __init__(self, protocol_name: str):
        self.protocol_name = protocol_name
        self.liquidity = 0
        self.reserve = 0
        self.fees_collected = 0
        self.supply_owned = 0
        self.history = []
    
    def add_liquidity(self, amount: float):
        """Add liquidity to protocol."""
        self.liquidity += amount
        self.supply_owned += amount
        self.history.append({
            'event': 'add_liquidity',
            'amount': amount,
            'total_liquidity': self.liquidity
        })
        print(f"Added {amount} liquidity")
    
    def collect_fees(self, fees: float):
        """Collect fees from protocol operations."""
        self.fees_collected += fees
        self.reserve += fees * 0.3  # 30% to reserve
        self.history.append({
            'event': 'collect_fees',
            'amount': fees,
            'reserve': self.reserve
        })
        print(f"Collected {fees} in fees")
    
    def buy_back(self, amount: float):
        """Buy back tokens using reserve."""
        if amount > self.reserve:
            print(f"Insufficient reserve: {self.reserve}")
            return
        self.reserve -= amount
        self.history.append({
            'event': 'buy_back',
            'amount': amount,
            'reserve': self.reserve
        })
        print(f"Bought back {amount} tokens")
    
    def get_metrics(self) -> Dict:
        return {
            'protocol': self.protocol_name,
            'total_liquidity': self.liquidity,
            'reserve': self.reserve,
            'fees_collected': self.fees_collected,
            'supply_owned': self.supply_owned
        }

# Simulate protocol
protocol = ProtocolOwnedLiquidity("DeFi 2.0 Protocol")

print("Protocol-Owned Liquidity Simulation:")
protocol.add_liquidity(1000000)
protocol.collect_fees(15000)
protocol.collect_fees(12000)
protocol.collect_fees(8000)
protocol.buy_back(5000)

metrics = protocol.get_metrics()
print(f"\nProtocol Metrics:")
print(f"  Total Liquidity: {metrics['total_liquidity']:,.0f}")
print(f"  Reserve: {metrics['reserve']:,.0f}")
print(f"  Fees Collected: {metrics['fees_collected']:,.0f}")
print(f"  Supply Owned: {metrics['supply_owned']:,.0f}")

# ----------------------------------------------------------------
# PART B: DEFI 2.0 PROTOCOL COMPARISON
# ----------------------------------------------------------------

print("\n" + "-"*60)
print("PART B: DeFi 2.0 Protocol Comparison")
print("-"*60)

protocol_data = {
    'Protocol': ['Uniswap V3', 'Aave V3', 'Lido', 'Yearn V2', 'GMX', 'Pendle'],
    'Category': ['DEX', 'Lending', 'Staking', 'Yield', 'Perpetuals', 'Yield Trading'],
    'Innovation': ['Concentrated Liquidity', 'Isolation Mode', 'Liquid Staking', 'Multi-strategy', 'Low Fees', 'Yield Tokenisation'],
    'TVL (B)': [4.5, 6.2, 14.0, 1.5, 0.8, 0.3],
    'Capital Efficiency': ['High', 'Medium', 'High', 'Medium', 'High', 'Medium']
}

protocol_df = pd.DataFrame(protocol_data)
print(protocol_df.to_string(index=False))

# ----------------------------------------------------------------
# PART C: DEFI 2.0 TRENDS DASHBOARD
# ----------------------------------------------------------------

print("\n" + "-"*60)
print("PART C: DeFi 2.0 Trends Dashboard")
print("-"*60)

trends_data = {
    'Trend': [
        'Protocol-Owned Liquidity',
        'Liquid Staking',
        'Cross-Chain Composability',
        'Institutional DeFi',
        'Structured Products',
        'Risk Management',
        'Sustainable Tokenomics'
    ],
    'Maturity': ['Growth', 'Mature', 'Growth', 'Emerging', 'Growth', 'Growth', 'Growth'],
    'Impact': ['High', 'Very High', 'High', 'Very High', 'Medium', 'High', 'High'],
    'Key Players': [
        'Olympus, Tokemak',
        'Lido, Rocket Pool',
        'LayerZero, Axelar',
        'Fireblocks, Coinbase Prime',
        'Ribbon, Pendle',
        'Aave V3, Compound V3',
        'Various Protocols'
    ]
}

trends_df = pd.DataFrame(trends_data)
print(trends_df.to_string(index=False))

# ----------------------------------------------------------------
# PART D: SUMMARY AND RECOMMENDATIONS
# ----------------------------------------------------------------

print("\n" + "="*70)
print("PART D: Summary and Recommendations")
print("="*70)

print("""
DeFi 2.0 – Key Takeaways:

1. DeFi 2.0 addresses DeFi 1.0 limitations: liquidity fragmentation, capital inefficiency, sustainability issues.
2. Protocol-Owned Liquidity (POL): protocols own their own liquidity, reducing reliance on LPs.
3. Liquid Staking: allows stakers to maintain liquidity via derivative tokens.
4. Dynamic Yield: automated optimisation of yield across strategies.
5. Cross-Chain Composability: enabling DeFi interactions across chains.
6. Institutional DeFi: growing integration with traditional finance.

Recommendations:
  - Explore protocol-owned liquidity models.
  - Consider liquid staking for capital efficiency.
  - Monitor cross-chain interoperability developments.
  - Prepare for institutional adoption.
  - Implement robust risk management frameworks.
  - Stay updated on DeFi 2.0 innovations.
""")

print("="*70)
print("END OF LESSON 3 – MODULE 8")
print("="*70)